Great growth in trade: international trade partners boost economy.

• Author: Wolf, Greg
• Position: TRADE

International trade is big business for Alaska. Fueled primarily by the global boom in commodity prices and increasing demand for Alaska's wild-caught seafood, the state's export companies have experienced steady growth during the past seven years. In 2007, total overseas exports from Alaska amounted to $3.9 billion, just shy of the all-time record of $4 billion achieved in 2006. This represents an increase in export values of $1.5 billion during the period as exports were at the $2.5 billion level at the beginning of the decade. (See chart).

Alaska's major trading partners are concentrated mainly in the Pacific Rim. Asian countries hold the top three positions; Japan, China, and Korea together account for nearly 60 percent of the state's overall exports. Canada, Alaska's next-door neighbor, is the fourth-largest export market, accounting for nearly 12 percent of export shipments. In recent years, European nations have become larger customers for Alaska and now hold five of the top 10 rankings. Germany is the largest, followed by Spain, Switzerland, the Netherlands and Finland. Mexico rounds out the top 10 ranking. (See graph)

By commodity, seafood continues to be the state's leading export product. In 2007, seafood accounted for 51 percent of the state's total exports. Minerals, primarily zinc and lead, were second at 30 percent, followed by energy at 6 percent. The energy sector includes liquid natural gas, coal and refined fuel products. Precious metals, consisting of gold and silver, were the fourth-largest category, followed by fertilizers and forest products.

For decades, Japan has been the state's No. 1 trading partner. At $854 million, the country maintained that position in 2007. This represented 22 percent of the state's total exports. Since the early '90s, Alaska's exports to Japan have declined significantly. In 1992, the peak year for Alaska exports to Japan, shipments totaled $2.3 billion. Japan's "bubble economy" burst at the end of 1989, and during the next 10 years, the so-called "Lost Decade," Japan suffered from a deep recession. This economic decline has impacted Alaska's exports to the country as has other factors, including competition from farmed salmon producers, and the off-shoring of Japanese manufacturing to other, lower-cost countries in the region.

However, in spite of these circumstances, Japan remains one of Alaska's oldest and most valued customers. It is, for example, at $588 million in 2007, the largest...